To keep a good CIBIL score, you must practise diligent credit management. Your CIBIL score may not improve overnight, but there are several things you can do to help it. Increasing one’s CIBIL score can take anywhere from six months to a year. However, if you have a low credit score, there are numerous strategies available to help you improve your credit score. If you want to improve your CIBIL score, then here are a few ways:
Repayments on time
If you want to keep your credit score high, pay your loan EMIs and credit card bills on time. Banks consider regular EMIs that demonstrate you are responsible for on-time credit repayments, which may help you improve or increase your CIBIL score.
Loan Varieties
If you have a well-balanced mix of secured and unsecured loans, your credit score will improve. You may give the impression that you are a high-risk borrower if you only take out unsecured loans.
Maintain a low Debt to Income ratio.
While loan repayments may reduce the amount owed over time, it is also advised that you do not frequently exceed your credit card limit, as this will harm your creditworthiness.
Applying for Multiple Credits
Applying for multiple credit cards at once may appear appealing because they provide a quick source of cash. Maintaining too many credit cards, on the other hand, can be difficult at times, and missing even one EMI will affect your credit score.
Maintaining Old Accounts
Having an old debt on your credit report and paying its EMIs on time shows dependability and can help you improve your credit score.
Benefits of High CIBIL Score
There are numerous advantages to having a high CIBIL score. If you have a high CIBIL score, you can take advantage of all of the benefits that come with it. The following are some of the benefits or advantages of having a high CIBIL Score:
Low Credit card Fees and Low Interest Rates
If you have a good credit score, you will almost always be able to get the best interest rates and pay the least amount of finance charges on credit card balances and loans. If you pay less interest, you may be able to pay off your debt more quickly.
Credit Card & Loan Approval is Straightforward
When you have a high CIBIL score, your chances of getting your credit applications approved improve. You should not be afraid to apply for a loan or a credit card in general. Because banks consider you creditworthy for a loan if you have a high CIBIL score, your loan or credit card application is more likely to be approved.
Increases your Negotiating Power
You may be able to negotiate lower interest rates on credit cards and loans if you have a high credit score. If you have a low CIBIL score, the bank will charge you a high interest rate on your loan application. If you have a low CIBIL score, you will be unable to further negotiate the terms with the bank.
Simple loan extensions
You can quickly apply for a top-up and increase the loan amount on an existing loan because banks will evaluate your credit score and consider it to easily add some money to the existing loan amount.Your credit score may suffer in some cases as a result of underlying issues. As a result, in order to enjoy all of these above benefits you need to have a high CIBIL score. However, if you have a low score, then you can follow steps on how to improve CIBIL score. A low CIBIL score can have numerous drawbacks, just as a high credit score can have numerous benefits. As a result, it is critical to regularly monitor your credit score to avoid any anomalies.
